Monday, January 21, 2019

How To Teach Your Children the Value of Money ♥

We all want our children to grow up and live prosperous lives. One of the most vital aspects of being an adult is successfully managing money. It is essential to our survival in the modern world.
So how do we teach our kids how to look after their finances? It’s not something that is taught in school (and I have no idea why because it'd be much more valuable than half the stuff children are taught in school!) and it’s not something they learn on their own. Therefore, it’s up to parents to teach them the value of money from an early age.

What is the best way to do this? Here are some ways you can effectively teach your children the key principles of money management. 

Allow Your Kids to Manage Real Money
To truly teach your children how to manage money, they need experience. Giving them real money to handle, whether that’s in the form of pocket money or an allowance, is the best place to start. Set a realistic budget each week or month that is high enough to teach them how to manage finances, but not so high that they will have unlimited cash. 

It is important that they have the risk of running out, to teach them one of the most basic rules of money management: when it’s gone, it’s gone. Try not to give them any additional cash if they do run low, as this will not teach them to be financially independent. 

Give Them Opportunities to Spend, Save and Bank
Make sure you allow your kids the opportunity to spend, save and bank. If you’re running some errands, let them pay for their own items in the shop. When they do spend, explain the importance of saving what they have left over for anything they may really need before their next allowance comes in. This will enforce the importance of saving money. 

Additionally, once they are at an appropriate age, set up their own bank account. This will teach them how the banking system works, how to withdraw, transfer and deposit money and how to manage their own account. Tyler has his own bank account and is now at an age where he enjoys going to the counter and depositing his money himself. It's great to get children into the habit of saving and most importantly, enjoying it, while they're still young.

Let Them Make Mistakes
Lastly, let them make mistakes. The best way for them to learn is by realising for themselves that they have spent too much too quickly or prioritised spending on the wrong items. Try not to wade in and stop them from spending in their own way. They need to discover that what they did may not have been the wisest choice and you can discuss better ways of managing their finances in the future.

How do you teach your children the value of money? 

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